South Korea economic growth surpassed estimates in Q1, thanks to chips
A screen displays the closing figure of the Korea Composite Stock Price Index (KOSPI) inside a trading room at Hana Bank in Seoul, South Korea, on April 8, 2026.
Hwawon Lee | Anadolu | Getty Images
South Korea’s economy beat expectations in the first quarter of 2026 to record the fastest growth since mid-2020, as booming semiconductor demand offset the drag of weak public spending, central bank data showed on Thursday.
Gross domestic product expanded 1.7% in the January-March quarter from the prior three months, the Bank of Korea said, blowing through the median Reuters poll estimate of 1.0% by a wide margin.
The gain marks the strongest quarterly jump since the third quarter of 2020 for Asia’s fourth-largest economy, when it was on a post-pandemic rebound.
Growth was driven by a 5.1% jump in exports, led by shipments of “IT components including semiconductors” used in artificial intelligence infrastructure, the BOK said.
Private consumption rose 0.5% after showing tentative signs of recovery in January and February as household confidence improved, while government expenditure grew just 0.1%.
Facility investment gained 4.8% after shrinking 1.7% in the last quarter of 2025.
From a year earlier, South Korea’s economy grew 3.6%, compared with a 1.6% expansion in the fourth quarter and beating a median estimate for 2.7% growth.
<
